How to find economic growth
AP Macroeconomics · Learn by Concept
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AP Macroeconomics › How to find economic growth
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1
In order, the four phases of the business cycle are:
expansion, peak, contraction, and trough
CORRECT
expansion, contraction, peak, and trough
contraction, expansion, peak, and trough
peak, contraction, expansion, and trough
Explanation
The four phases of the business cycle are expansion, peak, contraction, and trough. Real GDP growth is positive during an expansion, followed by a point at which real GDP growth peaks, then begins to decline during a contraction, and finally a bottoming out at the point of the trough. Each of the other answer choices represents a distortion of this order.